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3i Group and Spaceandpeople are two of the companies on my list that I consider are undervalued. There’s a few ways you can value a company. The most popular methods include discounting the company’s cash flows it is expected to create in the future, or comparing its price to its peers or the value of its assets. Analysing the most recent financial data, I’ve created a list of companies that compare favourably in all criteria, making them potentially good investments.
3i Group plc (LSE:III)
3i Group plc is a private equity firm specializing in direct and fund of fund investments. Formed in 1945, and currently headed by CEO Simon Borrows, the company size now stands at 241 people and with the company’s market cap sitting at GBP £8.97B, it falls under the mid-cap group.
III’s shares are currently hovering at around -36% below its intrinsic level of £14.74, at a price tag of UK£9.43, based on its expected future cash flows. signalling an opportunity to buy the stock at a low price. Moreover, III’s PE ratio is around 7.49x against its its Capital Markets peer level of, 15.56x meaning that relative to its comparable company group, III can be bought at a cheaper price right now. III is also in good financial health, with near-term assets able to cover upcoming and long-term liabilities. It’s debt-to-equity ratio of 9.10% has been reducing over time, demonstrating III’s capability to reduce its debt obligations year on year. Interested in 3i Group? Find out more here.
Spaceandpeople plc (AIM:SAL)
SpaceandPeople plc markets and sells promotional and retail licensing space on behalf of shopping centers and other venues in the United Kingdom, Germany, and India. Founded in 2000, and currently run by Matthew Bending, the company currently employs 99 people and with the market cap of GBP £6.05M, it falls under the small-cap category.
SAL’s shares are currently trading at -39% lower than its true value of £0.51, at the market price of UK£0.31, according to my discounted cash flow model. The discrepancy signals an opportunity to buy low. Additionally, SAL’s PE ratio is trading at 6.61x compared to its Media peer level of, 20.66x suggesting that relative to its peers, you can buy SAL for a cheaper price. SAL is also a financially robust company, with near-term assets able to cover upcoming and long-term liabilities. SAL has zero debt on its books as well, meaning it has no long term debt obligations to worry about. Continue research on Spaceandpeople here.